Ralph Benko has some interesting insights about Hillary Clinton and her 2016 run for President:
Hillary Clinton has zero ability credibly to run to the left of Elizabeth Warren. Witness: she tried to backpedal her claim that businesses don’t create jobs. As noted in Newser, she stated
“I short-handed this point the other day, so let me be absolutely clear about what I’ve been saying for a couple of decades.” She adds that a strong economy is based on businesses and corporations creating ‘good-paying jobs,’ not on corporations getting tax breaks while outsourcing jobs and “stash[ing] their profits overseas.”
This is a very lame “clarification.” She thereby managed to antagonize both her party’s activist base and its moderate wing.
Things fall apart. The straddle cannot hold.
Stephen Moore and Jon Kyl take to the Wall Street Journal to talk about the President’s insane tax policy:
The ripple effect of the president’s tax hikes is swamping take-home pay.
The high corporate tax rate is also holding the economy back. Twenty years ago the U.S. rate was about at the international average, but now we are about 15 percentage points above the rate of most of our competitors and nearly three times higher than countries like Ireland. The American Enterprise Institute has found that “a 1% increase in corporate tax rates is associated with nearly a 1% drop in wage rates” because when corporations invest less here at home, worker productivity suffers.
Mr. Obama’s investment tax hike was designed to soak the rich. But it is the middle class who have taken a bath. Republicans should be telling American wage-earners that the best way to increase their take-home pay is to repeal Mr. Obama’s tax hikes and chop the corporate tax rate to the international average, so more and better jobs are created on these shores, not abroad.
Stephen Moore uses his Investor’s Business Daily column to magnify the “Left’s War on Business”:
Hillary Clinton is getting deservedly attacked for her imbecilic statement at a Democratic political gathering in Massachusetts on Friday about business and jobs.
“Don’t let anybody tell you that, ah, you know, it’s corporations and businesses that create jobs,” she preached, to loud applause. “You know that old theory, trickle-down economics. That has been tried, that has failed. It has failed rather spectacularly.”
It may not be too surprising that Hillary can’t connect the dots that it takes an employer to create an employee to create wages and salaries.
That’s how some 150 million Americans get paid every week. Ms. Clinton has made her millions in the cattle futures market, as a government employee and giving speeches for fees of $250,000 a pop. Nice work if you can get it. The rest of us mere mortals need a paycheck.
Ralph Benko looks at the political landscape in today’s Forbes.com article where he touches many topics:
The Democrats most emphatically are presenting a shrill “income inequality” campaign theme. As Democratic rock-star progressive Senator Elizabeth Warren (D-Mass) put it, in campaigning for the re-election of her progressive Democratic colleague Al Franken (D-Mn) “The game is rigged, and the Republicans rigged it.” Not to be outdone, Hillary Clinton recently declaimed “Don’t let anybody tell you it’s corporations and businesses create jobs….” Forgive my incredulity, which seems shared by a lot of us voters.
The proposed Democratic remedy? Mandatory minimum wages and “gender equality.”
Newspeak for government, rather than the market, determining wages.
The left elegantly is engaging in an attempt at reframing of the ambient degradation of economic (and social) mobility. There is plenty of blame to go around for economic sogginess. That said, the degradation mostly is an outcome of favored Democratic policies.
So-called “income inequality” is a tale to be pinned on the Donkey, not Pachyderm. Historical analysis strongly suggests that this, in its current degenerate form, came out of the lamp rubbed by Lyndon Johnson’s closing of the London gold pool and the Nixon Shock’s application of progressive-advocated policies such as wage-price controls and a tariff. These proved, of course, briefly popular and soon truly catastrophic.
The closed gold window is the sole lingering aftershock of the Nixon Shock. Whether or not money supply is calculable money demand inherently is not. Thus technocratic management of monetary policy by the Federal Reserve has proven debilitating to the economy. “Income inequality” correlates with the repudiation (by both Johnson and Nixon) of Bretton Woods and its replacement by technocratic discretionary Fed monetary policy.
Amity Shlaes has a really interesting article in the Pittsburgh Tribune-Review today:
Harding appointed Mellon as Treasury secretary, and Mellon adroitly rescheduled the debt; Harding and Mellon also passed a round of tax cuts. Harding was not a “naysayer” by temperament. He disliked using the veto on his old Senate colleagues. He appointed friends, rather than professionals, to key posts. Their corruption tainted his reforms and aborted them.
Few reckoned that Coolidge could continue or complete what Harding had started. Voters figured Coolidge was a lame duck, “the accident of an accident.” The real Republican candidate would emerge in 1924. Coolidge’s colleagues in Washington didn’t expect much either: “Coolidge had little about him that was regal,” recalled George Wharton Pepper, a senator of Pennsylvania.
Still, Coolidge pushed forward where Harding had hesitated. He and Mellon sought and received several more rounds of tax cuts, bringing the top marginal income tax rate down to 25 percent, a level even lower than Reagan’s. In his years observing railroads, Mellon had noted that when you cut the toll for a rail line, you might get more business. An owner charged, as Mellon put it, “what the traffic will bear.”
Mellon thought the same principle might apply to tax rates. Perhaps lower rates would permit more business activity and therefore bring higher revenues. Today we call this philosophy “supply-side economics.”
Several letters to the editor in today’s Wall Street Journal in response to a recent David Malpass piece:
Brian Domitrovic has a new piece over at Forbes.com, and you won’t want to miss it:
Laffer’s idea was a fudge, though—right? This idea of counting revenue from state and local places after a federal tax cut is some sort of snake oil, a trick too-clever-by-half to cover up the hole blown in the federal balance sheet by the tax cut—surely.
Except this was the way everyone, Democrats above all, always talked about tax cuts. In 1963, as President John F. Kennedy was shopping his tax cut (which Kemp-Roth would emulate), its supporters pointed to the wonderful results it would bring to the states and the localities.
– – – – –
All in the archives, again, ink on paper, “Board of Revenue Estimates” stationery in fact. The dismissal of the Laffer curve on the grounds of the evidence of the 1980s is weird enough. Government revenues did go up, and too much in fact, after the tax cuts.
Now it emerges that the record of tax cuts before Reagan’s has been obscured. One of the reasons Laffer’s argument about the states got minimal citations is that everybody blew off the fact that Democrats had traditionally made these arguments in favor of their own tax cuts.
The Pillars of Reaganomics is the first of several volumes that will make it passing easy to cite real sources in the history of supply-side economics. Here they are, published. And any prospects we have for productive fiscal and monetary reform can only be enhanced by sharper historical understanding.